Nomination does not confer beneficial interest: SC

By Our Legal Correspondent

NEW DELHI, AUG. 20. A `nominee' under an Insurance Policy (IP) or National Savings Certificate (NSC) is only authorised to receive the amount due under the IP or NSC, as the case may be, when the same is due and the `nomination' does not have the effect of conferring on the nominee any `beneficial interest' in the amounts payable thereunder, the Supreme court has reiterated.

On the death of the insured or the holder of NSC, as the case may be, the `legal heirs' of the insured or holder of the NSC would have sole right over the monies payable on due date, on the insurance policy or NSC, in accordance with the relevant law of succession governing them, the Bench said.

Delivering the judgment of the Bench, Mr. Justice R. P. Sethi pointed out that ``any amount paid to the `nominee' after valid deductions becomes the `estate' of the deceased,'' and ``such an estate devolves upon all persons who are entitled to succession under the law, custom or testament of the deceased holder.''

The Bench, which included, Mr. Justice K. T. Thomas, in disposing of an appeal, said a wife and daughter of the deceased (in this case) were entitled to the money after the deductions made by the brothers (of the deceased) - who were made as `nominees' in the concerned NSC (of the deceased.).

A `nominee' could not be treated as a legal heir or legatee of the deceased holder of the NSC or insurance policy, the Bench observed.

Send this article to Friends by E-Mail

Section  : National
Previous : BJP-JMM tussle to form Govt. in Jharkhand
Next     : SC ruling on courts' approach to forest offences